Maharashtra electricity regulator restores sops for wind power companies

MUMBAI: Maharashtra’s electricity regulator has directed the stateowned power distributor to withdraw two commercial circulars regarding levy and open access, saying they contradict some provisions of the Electricity Act, 2003.

The circulars, issued by Maharashtra State Electricity Distribution ( MSEDCL) in 2011, withdrew tax benefits and other perks including open access that were offered by the government to promote use of renewable energy.

The regulator’s order, made available on its website recently, will benefit wind power generators in the state like Enercon India and Ushdev International, and their consumers such as Tata Motors and Serum Institute of India.

These companies had approached the regulator after the circulars were issued. As per guidelines, consumers using one megawatt (MW), or more, of power fall under the category of ‘open-access consumers’.

The regulator has also clarified that the state-owned distributor is not relieved from its ‘universal service obligation’ to supply power in respect of open-access consumers. Wind turbine generators in the state say they have been incurring losses due to delay in issuance of credit reports and open access permission by MSEDCL. The distributor also issued bills withdrawing incentives granted to such companies, they add.

“Although I have not read the recent order, withdrawal of two internal circulars of MSEDCL will benefit wind-power producers in Maharashtra as they will be able to sell energy directly to industrial consumers under open access policy,” said Ushdev International’s vicechairman Arvind Prasad.

Renewable energy companies also allege that reduction in contract demand in respect of some of the open-access consumers has also led to termination of power procurement contracts with some open-access consumers.

“The energy that we produced since April 2012 was banked with MSEDCL as openaccess policies of these projects were not renewed after end of March 2012. We have now made application for open access and hope to monetise the banked energy once open access permission is granted,” Prasad added.